Terrorist attack in Nairobi

On Tuesday, a deadly terrorist attack claimed by al-Shabab shook Nairobi, with official fatalities rising to 21 people by the end of the week, according to Reuters. The attack, which took place on a hotel and office complex, started when gunmen threw bombs at vehicles in the parking lot and then entered the lobby of the building, where one detonated a suicide vest. The gunmen then made their way through the compound while opening fire.

While earlier government reports stated that the complex had been secured late in the evening on Tuesday, more heavy gunfire occurred on Wednesday morning as security forces continued combing through the building to rescue civilians who had barricaded themselves into rooms. Twenty hours after the attack began, Kenyan President Uhuru Kenyatta announced on Wednesday that the siege was over and “all the terrorists have been eliminated.”

Of the victims, 16 were Kenyan, one was British, one was American, and three were of African descent but have not yet had their nationality identified. The Red Cross office in Nairobi reported that at least 30 additional victims had been treated in medical facilities nearby.

Protests over fuel price increases and low living standards in Zimbabwe

Thousands of Zimbabweans protested this week, prompted by trade unions’ calls for a three-day national shutdown, in opposition to falling living standards and the government’s decision to more than double the price of fuel. This call for protests came shortly after the announcement of a strike by public school teachers and the end of a 40-day strike by doctors demanding pay in U.S. dollars and better working conditions.

The protests had mostly ended by Thursday, with businesses and banks reopening in the capital of Harare, but still pose a major challenge for President Emmerson Mnangagwa, who pledged to create jobs and attract foreign investment after his election in late 2017. Zimbabwe still faces shortages of foreign exchange, fuel, and medicine, as well as high inflation.

Over the past 20 years, the increase in computing power by about eight to 10 orders of magnitude has brought the costs of using digital technologies down to a tiny fraction of their year 2000 levels (Figure 1).

Figure 1. The costs of using many technologies are dropping rapidly

Eight orders of magnitude is quite substantial: Lant Pritchett notes that it is the ratio of the United States’ GDP to his personal annual income. The decline in costs is unlike that for any other technological innovation. It would be the equivalent of automobiles costing between $2 and $21 today (the Ford Model-T cost $850 in 1908 or $21,340 in 2012 dollars), or refrigerators costing between $1.50 and $15 today (they cost around $14,000 when they first came out).

During this period, levels of overall government effectiveness have hardly changed (Figure 2).

Figure 2. Government effectiveness scores

Source: Worldwide Governance Indicators, 2017

To be sure, there have been some successes in digital technology improving certain government programs and processes. Biometric registration, verification, and payment systems in India’s National Rural Employment Guarantee Scheme reduced leakages of funds by 35 percent. Electronic tendering of contracts increased procurement competitiveness and the quality of roads in India and Indonesia. One-stop, computerized service centers in Karnataka, India enabled citizens to receive birth and death certificates with, on average, 3.4 fewer visits, 58 fewer minutes per visit, and 50 percent less chance of being asked for a bribe compared to a typical government office. And mobile phone based monitoring of service providers reduced their absence rates by as much as 25 percentage points in India, Pakistan, and Uganda.

Despite these individual successes and considerable evidence that technology has improved productivity in the private sector, overall public-sector effectiveness does not seem to have been affected. Why not?

Three possibilities:

1. As the World Development Report 2016 suggested, technology requires complementary analog inputs to register an increase in effectiveness. Even if routine tasks can be automated, the final output requires human intuition, judgment, and discretion to be productive. While this argument is compelling in the abstract, it is hard to imagine that an eight-orders-of-magnitude decline in the price of the digital input hasn’t had some effect on this joint product. The elasticity of substitution between the digital and analog inputs must be precisely zero for this to be the reason that overall government effectiveness has not improved.

2. Public bureaucracies either do not want to—or cannot—adapt to digital technologies. They may not want to because, in a government setting, efficiency improvements may lead to a reduction in the agency’s budget. Also, better record keeping and greater transparency make it harder for bureaucrats to capture the rents from government procedures.

3. Digital technology creates monopolies, whereas the function of government is either to break up monopolies or to prevent becoming a monopoly of its own. Technology creates monopolies because the marginal cost of production goes down, and the marginal benefit to the user goes up, with the number of users in the system, as Uber or Facebook have shown. The private sector has embraced technology and seen increases in productivity precisely because it has enabled them to exercise monopoly power. The essential reason is that, with computers, the identity of the machine can be known easily (the IP address), but the identity of the user can only be known if the user provides it. This creates a huge incentive to centralize information about users, which gives the owner of that information monopoly power.

This centralization of information cuts both ways for government effectiveness. On the one hand, for those activities where discretion at the local level is not needed, centralized information can exploit economies of scale and improve efficiency. Among the success stories mentioned above, payment systems, procurement, and issuing birth certificates are all examples of activities that require very little discretion at the local level. On the other hand, for a large number of public-sector activities, including teaching, there has to be a balance between centralized and decentralized authority. While the central authority can monitor whether the teacher is absent or not, it is only information at the classroom level that enables the teacher to teach effectively. In fact, even the benefits of reduced teacher absenteeism seem to have dissipated after a few years.

In short, to improve government effectiveness across the board, the technology needs to be adapted to situations where some information is held at the local level while other information is at the central level. Interestingly, Tim Berners-Lee, the founder of the World Wide Web, is developing a similar system whereby all of a person’s information is stored in a Personal Online Data (POD) store that only the individual can access, while the internet remains free. Such a system may give governments the appropriate flexibility to tailor their systems and enhance overall effectiveness.

After months of an impasse in negotiations over a new labor contract, teachers in the Los Angeles Unified School District (LAUSD) this Monday reported to picket lines rather than the classroom. This strike, the first in 30 years for the nation’s second-largest school district, takes on added significance as it follows last year’s spring of discontent, where we saw large-scale teacher strikes and protests in a number of states.

Those following these developments may ask: Is this strike a continuation of the wave that originated out of West Virginia last year? And will it prompt more teacher actions, expanding the map even further?

In this piece, I contrast what we’re seeing on the ground in LAUSD with the events of last spring. Taking the number of differences into account, my conclusion is that the Los Angeles teachers’ strike marks a return to typical collective bargaining processes, rather than a resurgence of a teachers’ spring.

State versus local actions

While the crowd size of the LAUSD strike rivals many of the actions we saw last spring, it is important to highlight that this is still a local action. The strike is targeted at leaders in district offices in the hopes of securing the terms of a district labor contract (and other policies related to class size and support staff in the district). The fact that it has been 20-plus months since there has been an effective agreement between LA’s teachers’ union and school district is enough of a cause for the situation to come to an impasse. Contrast this with 2018’s teacher actions, though, where actions crossed district boundaries and prompted teachers to flock to state capitol buildings to prompt elected officials to take statewide actions.

Union versus grassroots organization

The political context and its implications for union power is another point of divergence. California’s status as a reliably blue state is an obvious difference against last year’s actions that occurred in primarily red states. Though the partisan lean of a state is not directly important here, the labor laws are—and red states often have comparatively weaker labor laws (e.g., many right-to-work states) that undermine union strength. With generally weak union leadership in these states, most of the teacher actions last spring saw unions taking their cues from grassroots organizers like #Red4ED. Even the first teachers’ strike in West Virginia last spring, which was mediated through the state union, continued several days as a wildcat strike after union representatives ordered teachers back to the classroom. The strike in LAUSD, however, is the ultimate step of teacher dissatisfaction in a typical union-represented, collective-bargaining process.

Riding a wave of public sentiment

It would be disingenuous to say that these are entirely unrelated strikes. The teacher activism of last year was widely reported on, raising awareness about the plight of educators in many states nationwide. Multiplesurveys of parents and the public at large showed robust support for raising teacher pay following the string of teacher actions last spring. The #Red4ED movement has been a presence both in LA and in other cities showing solidarity over the walkout.

The wave of public sentiment is not confined to the coast. Teachers in Denver are also mulling over a strike there, with robust public support. Earlier this past fall, Seattle narrowly averted a teacher strike and several districts in Washington state saw walkouts. Yet, my sense is that each of these new strike sites and the ongoing one in LAUSD are qualitatively different kinds of actions compared to what we witnessed last spring. In fact, according to numbers from Education Week, the U.S. has averaged about 10 teacher strikes per year at the district level since 2010—state-level strikes are much less common.

In other words, last year’s protests were an unprecedented teacher uprising, and this year’s mark a return to normal.

Twenty-five years ago this week, the United States, Russia, and Ukraine signed the Trilateral Statement and Annex, in which Ukraine agreed to transfer its nuclear stockpile to Russia. In exchange, Ukraine received compensation for the value of the highly enriched uranium in the nuclear warheads, assistance in eliminating the strategic delivery systems on its territory, and security assurances from the United States and Russia. Later that year, the United States, Russia, and the United Kingdom signed the Budapest Memorandum on Security Assurances with Ukraine, guaranteeing respect for Ukraine’s borders, independence, and sovereignty, and promising to refrain from the threat or use of economic and military force.

In 1996, Ukraine sent the remainder of its nuclear warheads to Russia, completing the surrender of the country’s position as the third-largest nuclear power.

In 2014, Russia violated the terms of the Budapest Memorandum by using military force to seize the Crimean peninsula, and later by supporting a violent separatist movement in eastern Ukraine.

The response to Russia’s violation from the United States and other powers has been disturbingly weak. In addition to violating its commitments to Ukraine, commitments that were key to persuading Kyiv to give up the world’s third-largest arsenal, Russia has devalued security assurances as a nonproliferation tool for discouraging countries from acquiring nuclear weapons in the future. It is but one example of Moscow’s untrustworthiness in a fraying international system.

Budapest undermined

The Budapest Memorandum was aimed at keeping Ukraine safe from Russia’s hegemonic ambitions. Instead, today’s Ukraine is reeling from a simmering conflict in its eastern regions, an ever-growing population of almost 2 million internally-displaced persons (IDPs), and more recently, Russian brinkmanship and the breach of maritime law in the Sea of Azov. Some of the separatist fighters are Russian soldiers and all the fighters operate under Russian military leadership. When the United States and Ukraine invited Russia to participate in consultations, as the Memorandum stipulates if questions arise concerning a signatory’s commitments, Moscow declined.

The Kremlin has rationalized its actions in a number of ways, including claiming that Russia signed the Budapest Memorandum with the Ukrainian government that existed under President Leonid Kuchma, not the government that took power following Ukraine’s 2013-14 Maidan revolution. But international law considers international agreements binding to states, not merely binding to the administrations who negotiate them. A critical element of diplomacy is the expectation that agreements made with one government transfer over to future governments.

Russia has little incentive to change course. The international community—including the United States—has not done nearly enough to make Russia’s actions in Ukraine costly for Moscow. Both Minsk agreements—the first negotiated by Ukraine, Russia, the Organization for Security and Co-operation in Europe (OSCE), and separatist leaders; the second by Ukraine, Russia, Germany, and France—failed to broker peace. But the problem goes beyond the Minsk peace process, Ukraine’s slow economic and political reform, and the lack of sanctions success. When the Russians violated the Budapest Memorandum, they severely undermined the agreement’s security assurances, making the security assurance mechanism less useful for resolving future proliferation cases.

Global nonproliferation dangers

That recklessness is all the more dangerous at a time when South Asia, East Asia, the Middle East, and other regions are subject to uncontrollable nuclear breakout. When the Nonproliferation Treaty came into effect half a century ago, there were five nuclear armed nations: the United States, the USSR, the United Kingdom, France, and China. Today, with the addition of Israel, India, Pakistan, and North Korea, the total is nine.

Russia’s transgression sends a message to countries like North Korea and Iran that they have less reason to trust security assurances or the involvement of Russia in future nonproliferation negotiations or commitments. Perhaps these countries might also wonder why they should trust the United States or Europe, when each has refrained from extending harsher penalties to Russia.

To reinforce a commitment to nonproliferation, Washington must do more for Ukraine. That means maintaining tight sanctions and escalating pressure on our European partners to expand sanctions on Russia. (The European Union recently voted not to impose additional sanctions on Russia over Russia’s seizure of Ukrainian ships in the Sea of Azov.)

It also means supporting an international peacekeeping force in Donbas, and increasing NATO warships in the Black Sea to push back on aggressive Russian naval activity. Sanctions could target Russia for its malign activities in the Sea of Azov by prohibiting Russian-flag commercial vessels and vessels with cargos loaded at Russian ports on the Sea of Azov or the Black Sea from docking in European or U.S. ports. The United States also should increase demands that Russia release wrongfully detained Ukrainian sailors—and state the consequences for Russia if they do not—and provide additional security assistance as Ukraine strives to rebuild its sea forces.

The tragic situation in Ukraine, and the illegal Russian action that caused it, is not only a humanitarian issue and gross violation of the modern international order. It also carries significant implications for global nonproliferation. This week’s anniversary passed with far too little recognition of the great sacrifices that Ukraine has made over the past 25 years—sacrifices that made the United States and the West safer.

A final, dispiriting coda: The Trump administration has made the United States part of the problem. During Trump’s campaign, he blithely said that instead of an American nuclear umbrella over U.S. allies, let them have their own arsenals. Recently he gave notice that the United States will pull out of the Intermediate-Range Nuclear Forces (INF) Treaty that prevented an arms race with Russia for over 30 years. The Trump administration’s Missile Defense Review, released this week, announced a “near-term” assessment of space-based interceptors, which are both impracticable and could lead to a Pandora’s Box of weapons in space, as well as the aggressive pursuit of a broad range of missile defense technologies. If there is a new contest to perfect and deploy missile defense, it will heat up competition in offensive weapons—and it will be Russia pointing the finger at the United States for weakening global nonproliferation and arms control, instead of the other way around.

2019 is shaping up as a year testing the Trump presidency on every front: foreign policy, trade, a potentially slowing economy, and relations with the Democratic-controlled House and an increasingly fractious Senate—eleven of whose Republican members just joined forces with Democrats to vote against lifting sanctions on a Russian oligarch.

Looming over all of this is the impending the Mueller report, along with aggressive Democratic oversight. A report whose credibility cannot be dismissed out of hand suggests that President Trump’s personal lawyer lied to Congress at his direction about his business dealings with Russia during the 2016 presidential campaign. The pressure on the president is intensifying, and according to a Pew Research Center report released today, Mr. Trump is in a weak position to withstand it.

Only 41 percent of Americans are confident that President Trump keeps his business interests separate from the decisions he makes as president, while 57 percent lack confidence that he separates them. If the special counsel finds evidence that the president’s business dealings in Russia spilled over into American foreign policy, a solid majority of the people will be inclined to believe it.

President Trump’s refusal to release his tax returns exacerbates this mistrust. Sixty-four percent of American say he should make them public, up 7 points since January 2018.

Even in this era of partisan polarization and mistrust of government, public doubts about their current president and his administration stand out. Fully 58 percent say they trust what Donald Trump says less than the utterances of previous presidents, and the public’s assessment of the ethical standards of top administration officials stands at record lows compared to administrations dating back nearly four decades.

These attitudes would be less dangerous for President Trump if the public had reached equally negative judgments about Special Counsel Robert Mueller. But this is not the case. Fifty-five percent of Americans are confident that Mr. Mueller is conducting a fair investigation into Russian involvement in the 2016 election. By contrast, only 37 percent believe that the president is handling matters related to the investigation appropriately.

Public confidence in the Special Counsel is deeply entrenched. Despite ongoing efforts by the president and his associates to discredit the investigation as a witch hunt, public approval of Mr. Mueller has not budged during the past twelve months, and the share saying they are “very confident” in him has increased.

Despite these negative views, President Trump enjoys about the same level of approval as he did a year ago, and Pew’s examination of eight different dimensions of public confidence shows why. Fifty-one percent of Americans believe that Mr. Trump will be able to negotiate favorable trade agreements with other countries, and 49 percent are confident that he will make good decisions about economic policy. But large majorities express a lack of confidence in his ability to perform the rest of his duties, including handling international crises, making wise decisions about immigration, and working effectively with Congress.

If President Trump strikes a trade deal with China and the economy continues to grow at a healthy pace, he may well retain his mediocre but remarkably stable public approval, and his party will stick with him. But if he plunges the United States into a trade war and the economy slows significantly, the bottom could fall out. He could find that a large number of Republican senators abandon him on critical issues, creating a veto-proof majority in the Senate. He could face a primary challenge for the Republican nomination. In the worst-case scenario he could find himself fighting impeachment by the House without solid Republican support in the Senate to protect him against conviction.

One thing is clear: as the pressure ratchets up, President Trump stands on shaky and potentially eroding ground.

In his essay, Mo Ibrahim, founder and chair of the Mo Ibrahim Foundation, highlights improvements in overall governance but limited progress on indicators related to youth. According to data from the 2018 Ibrahim Index of African Governance (IIAG), scores on the Education indicator measuring educational outcomes worsened for 27 countries, representing more than half of the continent’s youth over the past five years. Further, despite strong economic growth over the past decade, IIAG shows little improvement for Africa on the Sustainable Economic Opportunity indicator, highlighting the employment challenge for youth entering the workforce. He notes the need “to make sure the voice and expectations of the youth are included in policymaking.” In another Foresight Africa essay, Thione Niang also stresses the need to “elevate the voice and representation of young people in government.”

Given this focus on youth representation and inclusion, Figure 1.4 from the report presents some data on the issue. As the top figure shows, the median African leader is eight years older than the median OECD leader. As the distribution highlights, most African leaders are over 55 years old with several leaders over 75 years old. This contrasts sharply with the continent’s very young population at a median age of 20 years old. The age gap between the region’s population and leaders is also much larger, at 42 years, compared to the OECD’s 12 years.

Looking at parliamentary representation, 14 percent of sub-Saharan Africa’s parliamentarians are under 40 years old, close to the world average. However, it should be expected to be higher given that 70 percent of the region’s population is under 30 years old.

The race to be the Democratic nominee for president is officially on. You may think that Senator Elizabeth Warren (D-Mass.) was first out of the gate, but in actuality, former Congressman John Delaney (D-Md.) and former state Senator Richard Ojeda (D-W.V.) were already running. This could be a continuing trend between now and the nominating convention—lots of candidates throwing their hats in the ring, some you’ve heard of and others not. Still to come are, potentially: half a dozen senators, a former vice president, governors past and present and many others—including some high-profile women. The absence of a clear frontrunner and the sheer number of potential candidates has led to a lot of hand-wringing among Democrats about what might happen in 2020. But that concern may not all be warranted. The nomination race for the presidency is unlike any other political contest in America, so here’s what to know as 2020 ramps up.

How the Democratic nomination rules have—and haven’t—changed

The rules are not very different than they were in 2016. The biggest change is that superdelegates will not be allowed to vote on the first ballot. They will be allowed to vote on other convention business, on a second ballot (should that come to pass), or on the first ballot if their votes won’t change the outcome of the primaries. These changes mean that superdelegates will not play a big role in choosing the 2020 nominee—but they wouldn’t in any event. For all the attention they’ve garnered since 1984, when they were first used, superdelegates only played a significant role in those years when there was a clear establishment frontrunner. In 1984, former Vice President Walter Mondale had overwhelming support among superdelegates, as did Hillary Clinton in her two runs for the nomination. In those contests, the superdelegates helped the front-runner overcome setbacks. But 2020 doesn’t have a formidable frontrunner. Former Vice President Joe Biden is probably the closest there is, but from the Senate alone, he may have to compete against as many as five other candidates for superdelegates’ votes.

The complex rules for awarding delegates to presidential candidates have not changed in many years and will remain the same in 2020. First, there is a threshold of 15 percent of the primary vote for winning a delegate. In a twenty-person field, many candidates won’t win a single delegate. Second, while delegates are awarded proportionally—the calculations are to whole numbers—delegates (unless they are from small territories) don’t carry fractions of votes. Congressional districts usually have three-to-five delegates. Some very Democratic, usually African-American districts can have as many as nine delegates, but these are few and far between. So, in a field of 20 candidates, many will win only a handful of delegates. By the time Super Tuesday is over, candidates without delegates are likely to be walking ghosts.

California’s earlier primary isn’t likely to be a game-changer

Because the sequencing of primaries is what makes the presidential nomination process unique, some people think that California’s move to March 3, 2020—right after the important early states—will upend the game. But it will more likely just make Iowa and New Hampshire even more important. Big states are always moving their primaries early in an effort to get the attention the two small, early states get. And, ironically, it only serves to increase the importance of those small states. The reason? No one has the money or time to campaign in a state as big as California at the outset of the primary race, and the verdict from the early states will confer on the top two or three winners that most precious commodity in presidential nominating politics: momentum.

Furthermore, California’s early primary will not necessarily help a candidate from California such as Senator Kamala Harris. She will be expected to win the state. Losing it—even coming in second—would be a disaster that would hurt her momentum going forward. And while California does have the most delegates, it is not a winner-take-all state the way it is in the Republican nomination race. Even a solid performance in her home state may not help her delegate totals.

Iowa and New Hampshire will be as influential as ever

In a sequential contest, being first matters, which is why Iowa and New Hampshire fight like hell to maintain their places on the calendar. These two states will, along with Nevada and South Carolina, narrow the field. John Delaney and Richard Ojeda cannot withstand a 10th-place finish in either state. And Elizabeth Warren and Bernie Sanders (I-Vt.) cannot withstand a 2nd-place finish in New Hampshire. Coming from Massachusetts or Vermont—neighbors to New Hampshire, which share television and radio channels—means that expectations are high for candidates from those states. Winning in New Hampshire is not about the vote total but about expectations. In 1992, the late Massachusetts Senator Paul Tsongas finished first in New Hampshire. And no one cared. Governor Bill Clinton, plagued by scandals, finished second and got a boost of momentum that carried him through the rest of the season. One month and one day after winning the New Hampshire primary, the Massachusetts senator was out of the presidential race.

After Super Tuesday only the delegate count matters

Once the candidates have moved through the crucible of the early states, attention moves to the delegate count and actual human beings begin to be selected as delegates. In counting delegates it is not just the mathematical calculations that matter, it is also the delegates themselves and how loyal they are to the presidential candidates. By mid-March there will be candidates who won a handful of delegates in the first few weeks of the season. Many will simply drop out—freeing their delegates. Others will endorse another candidate and hope that the delegates they have will follow their lead. But as the season moves on, delegates (and their loyalty to the candidate) will matter more and more. If there are more than two candidates in the race by late spring there will be pressure to endorse whoever is in front.

If they don’t there is a possibility of a brokered convention but there have only been three serious convention fights in the modern nominating system and they have all been driven by strong ideological battles in the party. In 1972 the McGovern radicals (as in Senator George McGovern (D-S.D.)) fought the old-line party establishment. In 1976, former Governor Ronald Reagan led a conservative revolt against President Gerald Ford, the last of the “Rockefeller” Republicans. And in 1980 Senator Ted Kennedy (D-Mass.) led a liberal revolt against the more conservative southerner President Jimmy Carter. It is difficult to wage a convention battle without an ideological underpinning.

Because the modern nominating system unfolds in a sequence of events it has many ways of winnowing out a crowded field. If history is any guide, by mid-March 2020 there will be many fewer players and by summer 2020 there is likely to be only one.

The Africa Growth Initiative at Brookings has just released its annual “Foresight Africa” report, illuminating six themes and recommending solutions for challenges facing African nations. “Africa is brimming with promise,” the report notes, and “in some places, peril.” Here are three charts out of many that populate the report’s analyses that showcase some of the important demographic changes and urbanization happening across the continent. See the full report here.

IN AFRICA: YOUNGEST POPULATIONS, OLDEST LEADERS

Thione Niang, co-founder of Akon Lighting Africa,” writes in the report that “youth in Africa are isolated and underrepresented in governance across the continent.” Sixty percent of Africa’s 1.25 billion people are under age 25—the youngest population in the world—but the median age of leaders in Africa is 62, older than the OECD median. However, Niang writes, “In many cases, the younger generation is more knowledgeable, equipped, and prepared to address the fast moving issues of today than the establishment leadership.”

BY 2050 ONE-THIRD OF GLOBAL YOUTH WILL BE IN SUB-SAHARAN AFRICA

John Page, a senior fellow in the Global Economy and Development Program at Brookings, writes that Africa’s failure to industrialize combined with a growing population of more educated and urbanized youth “is a crisis in the making.” He argues that industries “without smokestacks,” like tradable services, agro-industry, and horticulture may be key to addressing the problem.

AFRICA IS GAINING MORE LARGE CITIES

Acha Leke of McKinsey & Company and Landry Signé, a David M. Rubenstein Fellow with the Africa Growth Initiative, observe that potential investors in Africa should think of cities, not just the continent’s 54 countries. As the map below shows, by 2030 Africa will have 17 cities with more than 5 million inhabitants, but also 90 cities with at least one million. “Rapid urbanization is one good reason why companies should make cities a central focus of their African growth strategies,” they write.

A government job with its steady paycheck is supposed to be a ticket to the middle class. Yet 800,000 government workers just missed their first paycheck this weekend. During the last shutdown, two-thirds of government workers lacked savings to cover one pay period (two weeks) and this one is dragging on much longer. These workers are now entering a reality that has been increasingly affecting middle class families across America: severe income volatility.

Furloughed workers have already started taking steps all too common to families living paycheck to paycheck: curtailing spending, increasing credit card debt, delaying paying bills, and seeking short-term, small dollar credit. As these federal workers curtail spending—others are also impacted. Waiters are confronted with empty tables, taxi drivers with no fares, and service providers with skipped appointments—all seeing their wages fall unexpectedly. As the shutdown dominoes continue to fall, these negative volatility shocks spread.

Financial institutions are surprisingly ill equipped with reasonable products to help families handle short-term small-dollar credit needs. Families who overspend on their debit card are hit with a $35 overdraft fee—and this adds up. Americans overdraft to the tune of $24 billion a year. And those that need just a few hundred dollars to make it until the shutdown ends, will find that it can be more difficult to borrow $1000 to bridge this gap than it is to borrow $20,000 for a car. As a result, like 2.5 million households last year, they may choose to use a payday loan, often paying interest rates of 300-400 percent. Remember that everyone who uses a payday loan has a bank account, as a postdated check is collateral for the loan.

Entering this world may come as a shock to federal employees who are used to the stability of a government job. Stability that helps offset what are often lower wages than people realize: the average salary of a TSA inspector is $40,000. While Congress passed and the President signed legislation mandating back pay when the shutdown ends, that law is not putting anything into their bank accounts today. Furthermore, non-government workers who are directly impacted may never be made economically whole from the shutdown’s loss of economic activity.

This new reality for government workers highlights what is the norm for a growing number of middle class families.

This new reality for government workers highlights what is the norm for a growing number of middle class families. Sixty percent of workers in America are hourly employees and these hours are hardly constant—especially when business is slow. Research by the JP Morgan Chase Institute looked at 6 million of Chase’s customers and found that over the course of a year, “On average, individuals experienced a 40 percent change in total income on a month-to-month basis”. In fact, income stability was actually the rarity, as 13 out of 14 families had income fluctuations of 5 percent or more on a monthly basis.

There are many reasons why income varies: fewer hours due to scheduling or bad weather, alimony and child support checks that are late, and second or third jobs that are seasonal. Research from the Center for Financial Services Innovation found that “Families typically experienced almost three months when their incomes fell at least 25 percent below their average income.” As the gig economy and contingent work grows this trend will accelerate.

How to improve the lives of those dealing with income volatility? When the shutdown ends, federal workers need to receive their back pay as quickly as possible. Until then, it is good to see that some financial institutions have stepped up to help. Sandy Spring Bank, a Maryland bank, is offering a line of credit for up to $7,500 at 5.5 percent for 60 days to customers impacted by the shutdown. The U.S. Treasury Department Federal Credit Union will loan members their net pay for one or two pay periods at no cost for 30 days and 6 percent interest after that, as well as provide a 30-day grace period for existing loans upon request. More should follow suit. Each day matters, especially the first of the month when many fixed expenses are due.

More broadly, policy makers and the private sector need to adapt existing mindsets to the reality of income volatility. Ideas to allow workers faster access to earnings deserve more attention. Walmart and Uber are experimenting with this: after all why should I wait up to three weeks between working and being paid? Transitioning to a real-time payment system would make everyone’s funds available immediately, not 1 to 5 days later. This technology is already widespread in the rest of the world and is slowly starting to be rolled out in the U.S. The Federal Reserve (Fed) has the legal authority to require this and they just asked the public how to proceed. The answer is immediately. While many government workers are currently feeling the impact of income volatility—this problem is widespread and growing. Our payment and financial system needs to adapt accordingly.